I saw “The Descendants” on the weekend. It is a great movie in its own right, but also a great movie from the perspective of an estates and trusts lawyer. The movie raises a number of estates and trusts issues: trusteeship, powers of attorney, living wills, and the threat of estate litigation.
Without wanting to give away the plot, one of the issues referred to in the movie is the “rule against perpetuities”. I don’t expect that “rule against perpetuities” movies will be a new film genre. However, it is an interesting concept and significantly moves the story in “The Descendants” forward.
Simply put, and as well explained in the movie, the rule provides that no interest in a trust will be valid if the trust vests more than twenty-one years after the termination of some life in being at the time of the creation of the trust. The effect of the rule is that a trust cannot continue on indefinitely, and must vest at some point: that is, the trust must vest twenty-one years after the death of a prescribed person.
Much case law, legislation and commentary has evolved in relation to the rule against perpetuities. However, the general application of the rule in most cases remains, and property in a trust cannot be held in the trust indefinitely. We cannot freeze the past forever, and must move on.
Thank you for reading.
Paul E. Trudelle - Click here for more information on Paul Trudelle